DNZ
08/04/2014 08:30
GENERAL
REL: 0830 HRS DNZ Property Fund Limited
GENERAL: DNZ: DNZ gets underway with Westgate Regional Mall
DNZ Property Fund Limited ("DNZ") has confirmed construction of its new
enclosed shopping centre ("Mall") at Westgate has started. The mall, which is
scheduled to open in October 2015, is part of a new regional town centre at
Westgate ("Westgate Town Centre") and a strategy to transform the whole North
West area. The Mall will feature around 90 specialty stores, a Farmers
department store and Countdown supermarket.
"This is a much needed modern, high quality retail facility for the local
community." says DNZ Property Fund's Chief Executive, Peter Alexander. "The
large existing catchment is one of the least developed in terms of retail
facilities(1). The new Mall, together with the surrounding facilities, will
serve not only the existing community but also an incredibly fast growing
part of Auckland."
"We have exceeded our pre-leasing target, allowing us to commence the
development with confidence." adds Mr Alexander. "We have built a great team
with extensive experience of delivering prominent and successful retail
projects in New Zealand and internationally. We expect this to be a top
quality growth asset and a solid investment opportunity for DNZ and its
shareholders."
Farmers owner David Norman says "The DNZ Westgate project presents a
significant opportunity for Farmers to open a flagship store. Our proposed
footprint of 8,000m2 will be one of the largest in our Group and demonstrates
our confidence in Westgate as a retailing location."
Countdown's General Manager Property, Adrian Walker, says the supermarket
company is pleased to be working with DNZ to bring a new Countdown store to
Auckland's North West. "It's great to be part of this vibrant retail
environment. We see real value in supporting the new development and
providing a modern store with an expanded product range that will really
compliment this growing community."
Located adjacent to the North Western Motorway and the newly completed upper
Harbour Motorway, the Westgate Town Centre (of which the Mall will form part)
will also feature an extensive network of parks and walkways and include
areas for outdoor dining and the large civic space will be pedestrian
friendly. The Council is partnering with the private sector to create the
centre's civic heart, including a state-of-the-art new library and a town
square as well as a skate park.
The Mall will complement Auckland Council's $325 million investment in the
North West Transformation Project that the 56 hectare Westgate Town Centre
forms part of.
"This Mall and the exciting new town centre will be an important hub for high
quality retail and commercial activity and the development incorporates
excellent new community facilities which will not only benefit the people of
the north west but people all over the Auckland region - and that's
incredibly exciting for the north west and indeed the region." says Deputy
Mayor Penny Hulse.
"The Council's collaboration with the NZ Retail Property Group to create this
new town centre for Auckland, has underpinned the achievement of this
milestone for DNZ and I am delighted the Mall development is now underway."
The total development cost of the Mall is just over $155 million, including
land at cost, with the value on completion estimated at $160 million. This
represents a yield on cost of circa 7.75 per cent, assuming the centre opens
fully leased. The initial pre-leasing target of over 40%, including the two
majors, has been exceeded.
The project will be funded from DNZ's current bank facilities. The Company
does not anticipate raising equity to fund the project following potential
divestment activity of non-core assets undertaken over the duration of the
project. The Company's loan to value ratio is not expected to exceed 40%
during the project, allowing for potential divestment activity. It is
anticipated that the dividends during the development phase will at least be
maintained at the current level of 9.0 cents per share.
DNZ's investment strategy has, as a general guiding principle, an intention
not to have more than 15 per cent of the value of its property portfolio, as
measured by aggregate completion cost, held as investment properties under
development, at any one time. This measure is forecast to peak at under 25
per cent during execution of the Westgate project.
DNZ Chairman, Tim Storey, said "Westgate provides the opportunity to enhance
the age, quality and growth orientation of the DNZ portfolio. This, combined
with the experience and capability of the Company's management team, a fixed
price construction contract and pre-leasing already achieved, has given the
Board confidence to approve an exception to the guideline."
1 Source MacroPlan Dimasi
ENDS
Attachments provided to NZX:
1: DNZ Westgate Background Document - 8 April 2014
2: DNZ Westgate Presentation - 8 April 2014
For media enquiries please contact:
Carolyn Kerr, Anthem, 021 373 777
For all other enquiries please contact:
Peter Alexander, Chief Executive Officer, DNZ Property Fund Limited
DDI: 09 913 1154 - Mobile: 0275 443 678 - Email:
[email protected]
Jennifer Whooley, Chief Financial Officer, DNZ Property Fund Limited
DDI: 09 913 1150 - Mobile: 021 536 406 - Email:
[email protected]
DNZ Property Fund Overview
DNZ Property Fund Limited owns one of New Zealand's largest diversified
investment property portfolios with $770.6 million (as at 30 September 2013)
of commercial office, retail and industrial properties located in the main
urban areas throughout New Zealand. As at 31 December 2013, DNZ Property Fund
owned 47 properties with 297 tenants, a weighted average lease term of 5.5
years and an occupancy rate of 99.4% over a net lettable area of 369,407m2.
DNZ Property Fund Limited is a Portfolio Investment Entity in which investors
hold shares and is managed by its own internal management team. DNZ also
holds management rights to Diversified NZ Property Fund Limited, a $117.4
million (as at 30 September 2013) commercial property portfolio.
DNZ's top 10 tenants as at 30 September 2013: Bunnings, Progressive
Enterprises (Countdown), NZ Government, Foodstuffs (PAK'nSAVE & New World),
ASB, Fletcher Building, The Warehouse, Westpac, Meridian Energy and Lion.
These 10 tenants represent 52% of the Company's total contract rental.
End CA:00249221 For:DNZ Type:GENERAL Time:2014-04-08 08:30:04
